In a significant policy shift, the Spanish government announced plans to phase out the controversial golden visa program, a decision aimed at curbing speculative real estate investments and ensuring affordable housing. Prime Minister Pedro Sánchez, during a visit to Seville, revealed that the Council of Ministers would deliberate on a report proposing changes to the 2013 law that permits foreigners to obtain residency through substantial real estate investments.

The initiative seeks to eliminate the option of acquiring a residence visa by investing over half a million euros in the housing sector, a move Sánchez describes as essential to transforming housing from a speculative asset to a guaranteed right. With 94% of investment-based residence permits linked to property purchases in tourism-heavy cities such as Barcelona, Madrid, and Valencia, the government highlights the undue pressure on the housing market, rendering it challenging for locals to find affordable housing.

Sánchez emphasized the need for a new national model that prioritizes affordable living over investment-driven housing inflation, citing the aim that no citizen should spend more than 30% of their income on housing. This decision comes as cities face a housing crisis, with young people and families particularly affected by soaring property prices.

Despite the lack of recent detailed statistics on the golden visa program, data up to 2022 indicates Spain approved nearly 11,500 visas, predominantly for real estate investments. The proposal to discontinue the program marks a critical step towards addressing housing accessibility and inequality issues, although the precise legislative path and timeline for these changes remain uncertain.

As Spain navigates this policy transition, the focus on affordable housing and the impact on the real estate market and foreign investment will be closely monitored. The Sánchez administration, operating with a minority government, will require broad political support to enact these significant legislative changes.